Why Ford (F) Stock Is Down Today

Shares of Ford (F) dropped in morning trading Tuesday after the U.S. automaker drastically reduced its full-year earnings forecast.

NEW YORK (TheStreet) -- Shares of Ford (F) fell 3.18% to $14.63 in morning trading Tuesday after the U.S. automaker drastically reduced its full-year earnings forecast.

CEO Mark Fields told investors on Monday the company now expects pretax profit in the range of $6 billion to $7 billion, an approximately $1.5 billion decrease from what the company had forecast in July.

Ford's guidance implies North American operating margins in the range of 8% to 9%, down from 11% in the last quarter.

Furthermore, Ford anticipates a $1.2 billion pretax loss in Europe in 2014, which would continue into 2015 at a reduced rate. The company also stated it no longer expects European demand to climb back up to the levels it reached before the recession, even by 2020.

Fields cited increasing problems in emerging auto markets and costs tied to both quality issues and U.S. recalls as the reasons for the reduction. Ford has dealt with an approximately $1 billion bill from warranty and recall costs, as well as $300 million from declines in Russia. The company also had a loss in South America that was $900 million greater than previously expected.

Ford has recalled 3.9 million U.S. vehicles thus far in 2014.

Separately, TheStreet Ratings team rates FORD MOTOR CO as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation: